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IMF hails focus on growth quality

By ZHAO HUANXIN in Washington | CHINA DAILY | Updated: 2021-03-13 07:16
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Staff members work at the workshop of the Northeast Light Alloy Co., Ltd. in Harbin, Northeast China's Heilongjiang province, March 9, 2021. [Photo/Xinhua]

The International Monetary Fund welcomes China's putting greater focus on the quality rather than the quantity of growth and being committed to greener development with a specific carbon neutrality goal, an IMF spokesman said on Thursday as the country's annual legislative session concluded.

The Government Work Report, approved at the conclusion of the weeklong National People's Congress meeting on Thursday, said China aims for gross domestic product growth of over 6 percent in 2021, with more efforts on reform, innovation and high-quality development.

Premier Li Keqiang told reporters that such a growth target is "not low" considering the size of the Chinese economy. He said that walking quickly for a moment does not mean one is walking steadily, and that "it is only with a steady pace that we will be firm in our steps".

Gerry Rice, director of the IMF's Communications Department, said, "We do welcome this greater focus on the quality rather than the quantity of growth."

"We think this should help reinforce China's quest to rebalance this growth model toward greener and more consumption-oriented growth," Rice told a news conference.

Rice, who has served as the department's chief since 2011, said the IMF has projected the world's second-largest economy to grow at 8.1 percent in 2021, after posting a 2.3 percent GDP increase last year, the only major economy to attain growth.

This suggests that growth above 6 percent should be easily reached, given China's fast recovery from the COVID-19 pandemic, the official said.

"But again, the absence of a specific range for a growth target in 2021 is welcome and should reinforce this focus on high-quality growth and rebalancing, which is a discussion we've been engaged in with the Chinese authorities quite constructively for the last several years," he said.

Rice said he had noticed that during the annual sessions of the national legislature and the top political advisory body, China had made a continued commitment to medium-term reform to strengthen high-quality, more consumption-driven growth, and confirmed its efforts in tackling climate change and reaching carbon neutrality by 2060.

Also, China's new five-year plan reaffirms the country's 2060 carbon neutrality goal, and going forward, the focus will turn to implementation of that goal, Rice added.

In this context, investment in non-fossil fuels combined with continued curbing of carbon emissions and energy intensity represent important steps toward slowing global warming, he said.

The 14th Five-Year Plan (2021-25) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 were approved by the NPC session on Thursday.

"It will be important to set China's carbon emissions on that downward trajectory that is commensurate with the scale of the global climate challenge," Rice said, adding that all countries, including China, need to set their carbon emissions on downward paths consistent with global climate targets.

Michael Hirson, head of China and Northeast Asia at Eurasia Group, a research and consulting firm based in New York, also said the "over 6 percent" growth target set by China drives home a message that the focus should be on the quality of growth.

"And the five-year plan for the first time doesn't have an average growth target so it shows you continued de-emphasis on hitting rigid GDP targets and instead more of a priority on quality," Hirson told CNBC on Thursday.

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